Demand for wheat, however, remains high and is growing (projected at 4.2 million tonnes in 2013/14, up from 4.1 million tonnes in 2012/13). While changing consumer tastes are driving an expansion of demand for wheat, recent government tax changes (an increase in the import levy from 5 to 20%) are likely to see a 6.25% contraction in consumption in 2013/14.
The Nigerian government has announced plans to increase from 10 to 40% the statutory percentage of cassava flour to be blended with wheat flour in the bakery sector by 2015, in an effort to curb the rise in the wheat import bill. The introduction of these policy measures has seen rising prices for wheat flour and other wheat based foods. In terms of the Nigerian governments cassava flour blending policy, USDA notes that if cassava inclusion into bread was actually feasible, Nigeria would be unable to meet cassava demand due to the countrys inadequate cassava production.
The huge and growing gap between production and consumption is met from imports, with the USA traditionally accounting for around 75% of imports, making Nigeria the third largest export market for US wheat. Rising prices as a result of government policy measures are leading importers to search for cheaper sources of supply.
Installed wheat milling capacity in Nigeria is 6.2 million tonnes, with 50% of capacity utilised in 2012/13. USDA suggests that the Nigerian government would be better advised to strengthen its economy by exploring the constantly growing domestic and export markets for wheat flour and other processed wheat foods. It argues that considering the idle capacity of more than 3 million tons, the hungry domestic and regional markets, and the available ready-to-work unemployed labor, flour milling and other wheat food processing industries can be developed quickly and [can] strongly contribute to the nations economy.
Nigeria: Wheat production, consumption, imports and exports, marketing years 2011/122013/14 (tonnes)
|MY 2011/12||MY 2012/13||MY2013/14|
Source: USDA, Nigeria Grain and feed update,GAIN Report, 24 October 2013 (see below)